Bringing the “Development” to Equitable Transit-Oriented Development

As housing and transportation costs continue to rise, regions across the country are looking for ways to ensure that all their citizens can affordably access housing, jobs, health, childcare and other essential services near transit.

Equitable Transit Oriented Development (ETOD) has become a key priority on the planning agenda for many regional and local communities over the last several years. As housing and transportation costs continue to rise, regions across the country are looking for ways to ensure that all their citizens can affordably access housing, jobs, health, childcare and other essential services near transit. To meet this need, planners, policy-makers, non-profits and others, are looking to support the investment and production of equitable transit-oriented development to ensure that development and transit benefits all people along a transit corridor, including those who are low-income.

At Living Cities, we are exploring how we can work with lenders, nonprofit advocates, metropolitan organizations and many other groups to help accelerate the transition from planning to implementation. This shift toward implementing ETOD requires a deeper understanding of how financing decisions affect and are affected by policy decisions. Toward this end, through our Connect Initiative, we commissioned William Fleissig of Communitas Development and Ian Carlton of ICRC to write a paper for stakeholders involved in making the critical decisions that drive equitable transit-oriented development to learn from what has worked - and not worked - in the past.

Their research highlights why ETOD projects often get stuck in what is typically called the predevelopment phase. Predevelopment is the first phase of a real estate project, when the developer identifies land, designs a project, engages partners, secures financing and obtains regulatory approval. This predevelopment process allows developers to revise their project plans and proposals to improve the feasibility of the overall development and mitigate for further costs. It is during this process that a developer makes a “go” or “no-go” decision on moving forward with a development.

However, the authors found that the ETOD delivery process - unlike a typical development process - begins long before the predevelopment phase as decisions integral to ETOD success are made several years, even decades, before the beginning of predevelopment. ETOD projects often get stuck during predevelopment because decisions made by transit and land use planners that determine public transit routes, station locations and infrastructure plans often do not take into consideration the site conditions and market characteristics required to support private development. Consequently, developers seeking to develop sites near transit must spend additional time and money finding funding, filing for zoning exemptions, and pursuing other actions to make these sites financially feasible.

This misalignment between what the author’s call “upstream” and “downstream” decisions is caused by many factors, including the different criteria and objectives that transit planners use vs. those that developers use. For example, transit planners are often required to limit costs. In some cases, this results in transit routes being built along unused former freight rail facilities which can be purchased at low prices, resulting in the surrounding sites being poor prospects for real estate development without significant time and subsidy. As noted in the case studies that accompany the paper, one of the key attributes of the Rosslyn-Ballston Corridor in Arlington, one of the most successful TOD efforts in the US, was the decision to locate the Metro system along a key existing urban corridor, rather than in freeway medians.

A key recommendation from the paper is for market feasibility assessments to be incorporated early in transit planning so that transit build-out can support development. In order to help regions avoid predevelopment pitfalls, the paper also proposes two new tools:

TOD Site Evaluation Checklist that stakeholders making transit and land use decisions could use to evaluate the feasibility of a site or proposed equitable TOD project. This checklist would include standard feasibility and market analyses as well as onsite expectations for housing and other amenities and other complicating factors such as land ownership, safety and security and physical site features. Having such a checklist would help regional stakeholders identify which stations could be developable.

TOD Investment Scorecard that allows investors to look across sites to compare the feasibility of different sites and then develop appropriate short- and long-term strategies to improve the potential for site development.

We are in process of learning more about the barriers to building equitable transit-oriented development and are excited to share these lessons from our research with William Fleissig and Ian Carlton with all of you. We invite you to read this paper and join the discussion. Please contact me at achung@livingcities.org to join the dialogue.

ResourceDocument:
Steps to Avoid Stalled Equitable TOD Projects

This paper was release as part of the Living Cities Connect work, which is exploring ways to increase the number of low-income people connected to job opportunities and essential services such as childcare, health services, etc.

Amy managed the Catalyst Fund, Living Cities' impact investing fund and leads the Living Cities Connect work, a cross-disciplinary effort focused on increasing the number of low-income individuals connected to opportunity. She now currently works with the California Endowment